China funds for foreign exchange rebound in January

February 20, 2012

China’s yuan funds outstanding for foreign exchange increased by 140.9 billion yuan (22.37 billion U.S. dollars) in January from December, rising for the first time in four months, the central bank said Monday.

However, the figure was far less than last January’s 501.65 billion yuan.

As of the end of January, the nation’s total yuan funds outstanding for foreign exchange stood at 25.50 trillion yuan, according to the People’s Bank of China.

Analysts said the reversed downward trend was because of eased concerns about the eurozone debt morass and a pickup in expectations for further appreciation of the yuan.

The rebound was due to capital inflows after a surge in the country’s foreign trade surplus and appreciation of the yuan, which was also a sign of investor confidence in China’s stable growth, said Lian Ping, chief economist at the Bank of Communications.

China amassed the world’s largest foreign exchange reserves, topping 3.18 trillion U.S. dollars at the end of December.